finance-pl

Templates and analytical tools only - not personalized financial, tax, accounting, or legal advice. P&L line classification, revenue recognition (ASC 606 / IFRS 15), and basis-of-accounting choice materially affect the figures. Review with a CPA before sharing externally (lender, investor, tax preparer).

Finance - P&L Statement

Generate a Profit and Loss statement with period-over-period comparison and key margin metrics.

When to use

• Monthly or quarterly P&L review
• Comparing actuals to a prior period or budget
• Building a financial summary for a business partner, lender, or investor
• Checking gross margin, operating margin, and net margin trends

For advanced financial modeling (scenario analysis, DCF), load the financial-modeler skill via skill_view('financial-modeler').

Required first prompt - basis of accounting

Before generating the P&L, ask:

Basis of accounting: cash / accrual / modified cash - REQUIRED. This materially changes what counts as "revenue" and "expense" for the period and which schedule (cash vs accrual) ties to the cash-flow statement. Do not generate a P&L without this declaration.

The P&L header MUST display basis_of_accounting: <selected> so any downstream reader sees it.

ASC 606 / IFRS 15 deferred-revenue treatment (accrual filers)

For SaaS / subscription / annual-prepay / multi-element / progress-billed contracts, recognize revenue as performance obligations are satisfied, not when invoiced or cash is collected. Common SMB pitfalls:

• Annual prepay SaaS - invoice $12,000 in January; recognize $1,000 / month; remainder sits in deferred revenue liability. A SaaS SMB selling annual prepay overstates revenue 12× without this treatment.
• Implementation / setup fees - generally recognize ratably over the expected customer life unless distinct from the subscription.
• Variable consideration (rebates, refunds, usage credits) - estimate and constrain per ASC 606-10-32-11.
• Right of return - if material, recognize net of estimated returns.

Cash-basis filers do not apply ASC 606 - revenue equals cash collected in the period - but should still note the deferred-revenue economic reality when sharing the P&L externally.

Inputs

• Basis of accounting: cash / accrual / modified cash (REQUIRED - see above)
• Period: month (YYYY-MM), quarter (YYYY-Qn), or year (YYYY)
• Revenue by category (product, service, subscription / recurring, other) - current and prior period
• Cost of revenue / COGS - current and prior period
• Operating expenses by category (R&D, S&M, G&A) - current and prior period
• Depreciation & amortization (D&A) - current and prior period (REQUIRED operating line)
• Owner compensation / draws (sole-prop or S-corp) - flagged separately for normalization
• Other income / expense (interest, one-time items) - optional
• Tax rate - optional; if unknown, output pre-tax income and note
• Budget - optional; include for budget vs actual variance column
• Business scale: revenue tier (<$1M / $1–10M / $10M+) - used to set scale-aware variance thresholds

Output format

PROFIT & LOSS STATEMENT
Period: [Period description]
basis_of_accounting: [cash | accrual | modified cash]
Jurisdiction: [SELECTED]
(in dollars, unless otherwise noted)

                              Current    Prior      Variance   Var %
                              Period     Period     ($)        (%)
                              --------   --------   --------   --------
REVENUE
  Product revenue             $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Service revenue             $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Subscription / recurring    $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Other revenue               $XX,XXX    $XX,XXX    $X,XXX     X.X%
                              --------   --------   --------
TOTAL REVENUE                 $XX,XXX    $XX,XXX    $X,XXX     X.X%

COST OF REVENUE               $XX,XXX    $XX,XXX    $X,XXX     X.X%
  (For SaaS, break out: hosting / direct labor / data / payment fees)
                              --------   --------
GROSS PROFIT                  $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Gross Margin                XX.X%      XX.X%

OPERATING EXPENSES
  Salaries & wages            $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Owner compensation (S-corp) $XX,XXX    $XX,XXX    $X,XXX     X.X%   ← reasonable-salary
  Owner draws (sole prop)     $XX,XXX    $XX,XXX    $X,XXX     X.X%   ← BTL: not an expense
  Marketing & advertising     $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Rent & facilities           $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Software & subscriptions    $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Professional services       $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Depreciation & amortization $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Other operating expenses    $XX,XXX    $XX,XXX    $X,XXX     X.X%
                              --------   --------
TOTAL OPERATING EXPENSES      $XX,XXX    $XX,XXX    $X,XXX     X.X%

OPERATING INCOME (LOSS)       $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Operating Margin            XX.X%      XX.X%

OTHER INCOME (EXPENSE)
  Interest income             $XX,XXX    $XX,XXX
  Interest expense           ($XX,XXX)  ($XX,XXX)
  Other, net                  $XX,XXX    $XX,XXX
                              --------   --------
INCOME BEFORE TAXES           $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Income tax expense          $XX,XXX    $XX,XXX
                              --------   --------
NET INCOME (LOSS)             $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Net Margin                  XX.X%      XX.X%

Key metrics summary

After the P&L, output:

KEY METRICS
                              Current    Prior      Change
Revenue growth (%)                                  X.X%
Gross margin (%)              XX.X%      XX.X%      X.X pp
Operating margin (%)          XX.X%      XX.X%      X.X pp
Net margin (%)                XX.X%      XX.X%      X.X pp
OpEx as % of revenue          XX.X%      XX.X%      X.X pp

Material variance flags (scale-aware)

Apply the threshold appropriate to business scale (single-flat threshold misleads at scale):

Flag any line item exceeding the applicable threshold for investigation:

Margin benchmarks (SMB reference - split bootstrapped vs venture-funded)

Owner-comp normalization note: for sole-prop and S-corp comparisons, normalize net margin by adding back / pulling out owner draws (sole-prop) or reasonable salary (S-corp) so the comparison to benchmarks is apples-to-apples. Owner compensation should be flagged distinct from wages.

Workflow

1. Collect inputs (ask for current period revenue and expenses; prior period for comparison).
2. Build the P&L table.
3. Calculate margins and key metrics.
4. Flag material variances.
5. Output the statement with observations.
6. Offer to save to build_report_path("business-finance", "pl-<period>.md").

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Templates and analytical tools only - not personalized financial, tax, accounting, or legal advice. Generated [DATE]. Jurisdiction: [SELECTED]. basis_of_accounting: [SELECTED]. Revenue recognition for SaaS / annual prepay / multi-element contracts requires ASC 606 / IFRS 15 treatment under accrual basis. D&A line and owner-comp normalization are required for benchmark comparison. Variance thresholds are scale-aware. Review with a qualified CPA or accountant before sharing externally. Wayland and the plugin authors disclaim all liability for use of these templates.